Tim Hortons (TSX:THI) and Burger King (NYSE:BKW) plan to join forces and create one of the world’s biggest fast-food businesses.
The restaurant chains — two of the biggest in North America — confirmed late Sunday evening (August 24) they were in talks to establish a new company to be headquartered in Canada.
Burger King’s majority owner, 3G Capital, would continue to own most of the shares but the two divisions would operate as standalone brands.
Headquartering the new company would pave the way to a tax inversion for U.S.-based Burger King, as it would be able to take advantage of lower corporate taxes in Canada.
The companies claimed the merger would create the world’s third-largest fast-food restaurant chain, with more than 18,000 restaurants worldwide and $22 billion in sales.
Tim Hortons is already Canada’s largest fast-food chain with about 3,500 outlets across the country. There are about 600 Tim Hortons restaurants in the U.S.
Stocks for the two companies soared Monday morning (August 25) after Tim Hortons and Burger King released a joint statement confirming merger talks.
Tim Hortons was trading at $82.49 after closing at $68.78 at the end of trading Friday afternoon (August 22).
Burger King stocks, meanwhile, had risen from $29.73 Friday to $34.57 Monday.
